Market inspires Prologis to put Space Park South up for sale

Space Park South owner seeks $40M for 15 buildings

Sep. 5, 2013

Written by

The Tennessean

One of Nashville’s biggest business parks has been put up for sale by an owner trying to cash in on a strong investment sales market for well-leased industrial properties nationwide.

San Francisco-based industrial real estate giant Prologis is seeking $40 million for Space Park South, which has 1.3 million square feet of space in 15 buildings off Antioch Pike. The buildings are 95 percent leased with 77 tenants, including a distribution center for appliance and home electronics retailer H.H. Gregg and CAM International, a local auto parts distributor.

“It’s just time to trim assets and people are selling now. ... People are now getting good pricing for assets that are fairly well-leased,” said Steve Preston, a senior vice president in Nashville with the private capital group at commercial real estate services firm CBRE, whose Atlanta office is handling listing of Space Park South.

The listing coincided with Panattoni Development Co.’s unrelated sale of two warehouses with 480,000 feet and 250,000 square feet, respectively, at its Beckwith Farms industrial park in Mt. Juliet to Denver-based Industrial Income Trust for nearly $24 million.

About two months ago, Industrial Income Trust, a real estate investment trust, acquired three warehouses in Lebanon and Murfreesboro from developer Panattoni for $50 million in the biggest industrial property sale this year.

Industrial Income Trust is a capital partner on a 706,500-square-foot warehouse that Panattoni is building for Ceva Logistics at Beckwith Farms.

“The investment sales market is strong ... for industrial properties, and there’s lots of renewed interest in the Nashville industrial market,” said Whitfield Hamilton, Panattoni’s regional partner for the Southeast. Ceva also leases the recently sold Beckwith I and Beckwith III buildings. Panattoni is building a 250,000-square-foot warehouse for health care products maker Hollister with sites for five more buildings at Beckwith Farms.

Prologis, a publicly traded real estate investment trust, has industrial properties nationwide, including nearly 5 million square feet of space in the Nashville area. Its Nashville holdings are mostly in the Smryna/La Vergne area, plus the Falken Tire warehouse in Lebanon.

While the number of industrial properties sold year to date is within a similar range as last year, more larger portfolios and institutional type properties are going to market and/or trading, said Todd Prevost, an associate director with the Capital Markets Group at Cushman & Wakefield|Cornerstone.

He said Space Park South and Crow Holding’s South Park and Centerpointe Distribution Center, which also are on the market, should command good prices.

“We are hearing from several ... investors that Nashville is on their buy list and, in short, there are too few opportunities being pursued by substantial amounts of capital,” he said.

Getahn Ward covers growth and development for The Tennessean. He can be reached at 615-726-5968 or at gward@tennessean.com. Follow him on Twitter: @Getahn